Incorporation of arbitration clause from another contract

Barrier v Redhall Marine [2016] EWHC 381, 30 March 2016 (Arbitration Law, 19 May 2016)

A dispute arose over the incorporation of an arbitration clause from a main contract between Redhall and BAE for the construction of submarines into a subcontract between Redhall and Barrier. There were conflicting authorities on this point. In Aughton Ltd v MF Kent Services Ltd (1991) 57 BLR 1, the Court of Appeal was divided as to whether general words of incorporation were sufficient. In Habas Sinai v Sometal [2010] EWHC 29 (Comm), however, Christopher Clarke J drew a distinction between (1) incorporation of an arbitration clause from another contract between the same two parties (general words could suffice); and (2) incorporation of an arbitration clause from a contract entered into between two other parties or between one of the parties and a third party (specific reference required). On the facts of this case, the High Court applied Habas Sinai and held that the general words of incorporation were not sufficiently clear to incorporate the arbitration clause into the subcontract.